Canada Stocks Pare Weekly Decline; Commodity Shares Rise

March 16 (Bloomberg) -- Canadian stocks rose for a second day, paring a weekly decline in the benchmark equity index, as economic data from the U.S. drove commodity shares higher.

Advantage Oil & Gas Ltd., which operates in western Canada, advanced 6.7 percent, the biggest gain among energy producers. Teck Resources Ltd., Canada’s biggest base-metals and coal producer, gained 3.4 percent. Astral Media Inc., the owner of the Movie Network cable channel, surged 34 percent after BCE Inc. agreed to acquire the company for C$3 billion ($3 billion). Extorre Gold Mines Ltd. fell 3.9 percent as producers of the precious metal retreated.

The S&P/TSX Composite Index increased 41.14 points, or 0.3 percent, to 12,496.96 in Toronto, limiting its weekly decline to 0.1 percent.

“There’s been positive economic news coming from the U.S., and we’re following in the wake,” Pat McHugh, senior managing director and Canadian equity strategist at Manulife Financial Corp.’s asset-management unit, said in a telephone interview. The unit oversees about $217 billion. “Oil is up, which certainly helps. Our banks have had good results. And Treasury yields coming up have helped insurance companies have a very nice week.”

The index was down 0.4 percent this week through yesterday, as commodity shares declined after China reported a smaller gain in exports than economists had forecast. Energy and raw-materials companies make up 45 percent of Canadian stocks by market value, according to Bloomberg data.

Demand Outlook

Canadian resources companies rebounded amid speculation that demand will climb in the U.S., which reported yesterday that jobless claims fell to a four-year low last week. The U.S. Labor Department reported today that consumer prices climbed less than forecast last month, showing inflation remains controlled. The country is the biggest crude consumer in the world and the second-biggest user of copper.

Advantage Oil & Gas rose 6.7 percent to C$3.80 after releasing a year-end report on its drilling program and reserves. Teck Resources increased 3.4 percent to C$36.75.

Fertilizer companies rose after data from the Fertilizer Institute showed a decline in potash inventories in February.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, gained 6.6 percent to C$45.40. Agrium Inc., a fertilizer company and farm retailer, increased 3.2 percent to C$85.22.

Financial Rally

Financial stocks in the S&P/TSX rose for a seventh straight day, led by insurers, after the Federal Reserve raised its assessment on the economy earlier this week and said that 15 of 19 U.S. banks would be able to maintain adequate levels of capital in a financial crisis.

Industrial Alliance Insurance & Financial Services Inc., a Quebec-based insurer, rose 2.2 percent to C$32.40. Bank of Nova Scotia, Canada’s third-biggest lender, gained 0.9 percent to C$55.86.

Astral Media rose 34 percent to C$48.55 after BCE, Canada’s biggest phone company, said it would buy the company to expand in Quebec’s French-speaking market.

Calgary-based Corus Entertainment Inc., the owner of the YTV cable television network, increased 7.5 percent to C$23.40.

Gold producers declined for the fourth time this week as futures fell after India, the biggest bullion buyer, raised its tax on imports of precious metals for a second time this year.

Goldcorp Inc., the second-largest producer by market value, retreated 1.1 percent to C$43.65. Extorre, which explores for the metal in Argentina, slipped 3.9 percent to C$6.54, the lowest price since Oct. 5.

To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net